MNI BRIEF: Treasury To Run Out Of Money Between July, Sept-CBO

The Treasury Department will probably run out of money to pay the nation’s bills between July and September unless Congress takes action, the Congressional Budget Office said Wednesday, acknowledging uncertainty due to the upcoming tax season.

CBO projects that, if the debt limit is not raised or suspended, the government’s ability to issue additional debt—other than to replace maturing securities—will be exhausted between July and September 2023. "The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from CBO’s projections. In particular, income tax receipts in April could be more or less than CBO estimates," CBO said.

"If those receipts fell short of estimated amounts—for example, if capital gains realizations in 2022 were smaller or if U.S. income growth slowed by more in early calendar year 2023 than CBO projected—the extraordinary measures could be exhausted sooner, and the Treasury could run out of funds before July," CBO added. After hitting the USD31.4 trillion borrowing cap on Jan. 19, Treasury Secretary Janet Yellen said the Treasury can keep up payments on debt, federal benefits and make other outlays at least through early June using cash receipts and extraordinary cash management measures.